Update on My Insurance Claim Situation

So, I scratched a parked car—nothing serious, Tried to settle privately, but the owner didn’t accept, so I had to file an insurance claim with AAMI. Got the claim number and sent it to him.

Now, the repair bill through insurance has come back at $2,600 . I met up with the guy last night, and we talked about a private settlement instead. He’s now asking $1,700 in cash to drop the insurance route.

I know there’s a chance he still goes through insurance, but if he agrees, can I withdraw my claim? What’s the best way to go about this, and should I take the private settlement or just let insurance handle it? Any advice would be really appreciated!